Lignol raises USD 2.5m in share sale, buys 11% in Australian Renewable Fuels

(SeeNews) – Aug 28, 2012 - Canadian biorefining technologies firm Lignol Energy Corp (CVE:LEC) said Monday it had raised in a stock offering CAD 2.46 million (USD 2.5m/EUR 2m) it needed to fund the buy of an 11% stake in Australian Renewable Fuels Ltd (ASX:ARW).

Lignol placed a total of 30.75 million of its common shares at a price of CAD 0.08 each.

Proceeds from the placement were used to partly fund the CAD-4.3-million acquisition of 275 million ordinary shares of Australian Renewable Fuels from Australian energy projects developer Wasabi Energy Ltd (ASX:WAS).

Canadian merchant bank Difference Capital Funding Inc (TSXV:DCF) was the lead investor in Lignol’s private placement with a direct investment of CAD 1 million. After the completion of the placement, Difference Capital holds a 12.5% stake in Lignol.

Under the terms of the Wasabi deal, Lignol paid CAD 500,000 in cash, 19 million Lignol common shares worth a total CAD 1.52 million and a 10-month secured convertible debenture worth CAD 2.25 million, convertible into Lignol common shares at a price of CAD 0.15 per share. Following the deal, Wasabi will have a 19.1% stake in Lignol, or some 28.9% after completing the conversion of the debenture.

(CAD 1 = USD 1.010/EUR 0.807)

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